Question

Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $215. Data for last year's operations follow: 9,600 9, 100 500 Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direet labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs! Fixed manutacturing overhead Fixed selling and administrative Total fixed costs 132 $336,000 525,000 $861,000 Required: 1. Assume that the company uses absorption costing Compute the unit product cost for one barbecue grill 2. Assume that the company uses absorption costing. Prepare an income statement for last year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that the company uses absorption costing. Prepare an income statement for last year. Chuck Wagon Grills, Inc. Absorption Costing Income Statement Net operating income foss)

Answer 1

1
Direct materials	65
Direct labor	32
Variable manufacturing overhead	15
Fixed manufacturing overhead	35	=336000/9600
Unit product cost	147
2
Chuck Wagon Grills, Inc.
Absorption Costing Income Statement
Sales	1956500	=9100*215
Cost of goods sold	1337700	=9100*147
Gross margin	618800
Selling and administrative expense	707000	=(9100*20)+525000
Net operating income(loss)	(88200)